Portfolio management is about allocating resources among competing investment proposals, e.g. among all requests for funding initiatives within a business unit. However, when competing in fast-moving, constantly changing markets, as many software products do, portfolio management serves a second purpose: it becomes an important tool for innovation management.
Portfolio management activities are typically performed periodically and provide the opportunity to develop an up-to-date picture of the market, with a special focus on changes in the market. Based on this, portfolio management can make the right allocation decisions to ensure the portfolio stays relevant. In fast-changing markets, this requires a focus on innovation.
To ensure this focus on innovation, software portfolio management may use the concept of three time horizons that Geoffrey A. Moore adapted to fast-moving high-tech and software markets. To ensure long-term success of the organization, the portfolio should be balanced in the sense of having all three time horizons adequately covered.
For software product mangers, it is important to understand how portfolio managers think and in particular to understand the difference between Horizon 1 and Horizon 2 investment requests. Based on this understanding, they can better frame their requests for investment, both for existing products or for new product initiatives.
Barbara Hoisl is an independent strategy consultant and trainer. Her focus areas include software product strategy, portfolio management, software-based product innovation, IoT products, corporate innovation and Lean Startup.
Barbara draws on more than 25 years of direct, first-hand experience in the global software and Internet industry, including 14 years with HP. At HP, she worked in business planning, strategy and M&A for HP Software.
Earlier in her career, she managed development for a complex enterprise software product line at HP, so she knows the operational side of the technology business as well.
During her career, Barbara acquired a deep understanding of growth and innovation models and of the business models that characterize the software and Internet industry.
She holds a master degree in Computer Science from Technical University of Kaiserslautern and is an ISPMA fellow and co-author of several ISPMA syllabi.
You can find her full CV at barbarahoisl.com/profile.